PRINCIPLES OF LOGISTICS

ABB 10402

TOPIC: WAREHOUSING

READING ASSIGNMENT NBR 4

NAME: SASI KUMAR A/L KIRUBAGARAN

ID: 53212119025

CLASS: 1BAVM SEM 2

Contents
1.0 DEFINITION OF WAREHOUSE in AIRLINE TERMS.................................................3

2.0 TYPES OF WAREHOUSE in AIRLINES.........................................................................4

3.0 FUNCTIONS OF WAREHOUSE in AIRLINES...................................................................6

4.0 IMPORTANCE OF WAREHOUSE TOWARDS AIRLINES................................................7

5.0 WAREHOUSE PROCESSES (ACTIVITIES IN THE PHYSICAL WAREHOUSE OF

AIRLINES).....................................................................................................................................8

5.1 Receiving...............................................................................................................................8

5.2 Put-Away..............................................................................................................................8

5.3 Storage..................................................................................................................................8

5.4 Picking..................................................................................................................................9

5.5 Packing..................................................................................................................................9
1.0 DEFINITION OF WAREHOUSE in AIRLINE TERMS

A warehouse is a facility that, along with storage racks, handling equipment

and personnel and management resources, allows us to control the differences
between the incoming flow of goods (received from suppliers, production centers,
etc.) and the outgoing flow of goods (goods being sent to production, sales, etc.).
Usually, these flows are not coordinated, and this is one of the reasons why it is
important to have storage facilities.

In terms of Airline it is defined as If there is one thing all airlines want to make
more use of it is their customer data. Unlocking the value of this unique asset, and
in some cases even finding out where it exists inside the airline, is an entirely
different matter.

One of the answers is to develop an effective data warehouse for the entire
business, termed an enterprise data warehouse, and the list is growing of those
looking at following the top tier carriers that are already well along this path.
Instead of multiple versions of their data being held by silo departments, airlines
that have progressed down the EDW path have just one version of the data that is
easily accessible by all departments and used as actively as possible to create
business opportunities and deliver competitive advantages.

A new wave of airlines is now looking at how they too can get in on the act,
and the really far-sighted players are looking at what can be learned from other
industries such as banking and retail, which are further down the EDW route than
aviation.
2.0 TYPES OF WAREHOUSE in AIRLINES.

In recent years, the role of warehousing in a well-designed supply chain strategy became
more important. Key indicators to measure the impact of the warehouse strategy are execution
time of orders, minimizing the number of out of stocks and operating as efficiently as possible.
Commercial airline companies are also familiar with these KPI’s.
So, warehousing and aviation have a lot in common. Both are sending goods (or persons in
the case of the airline) from one place to another.  Both do a consolidation of goods or
passengers before they reach out to the destination. Another similarity is the use of value-added
services. For example: business class or economy class, priority or normal boarding, additional
luggage, entrance to the lounge. Here are few types of warehouse used in general business and
Aviation industry or Airlines.

Private Warehouse

This type of warehouse is owned and operated by channel suppliers and resellers and
used in their own distribution activity. For instance, a major retail chain may have several
regional warehouses or “fulfillment centers” supplying their stores, or a wholesaler will operate a
warehouse at which it receives and distributes products.

Public Warehouse

The public warehouse is essentially space that can be leased to solve short-term
distribution needs. Retailers that operate their own private warehouses may occasionally seek
additional storage space if their facilities have reached capacity or if they are making a special,
large purchase of products. For example, retailers may order extra merchandise to prepare for in-
store sales or order a large volume of a product that is offered at a low promotional price by a
supplier.

Automated Warehouse
 With advances in computer and robotics technology many warehouses now have
automated capabilities. The level of automation ranges from a small conveyor belt transporting
products in a small area all the way up to a fully automated facility where only a few people are
needed to handle storage activity for thousands of pounds/kilograms of product. In fact, many
warehouses use machines to handle nearly all physical distribution activities, such as moving
product-filled pallets (i.e., platforms that hold large amounts of product) around buildings that
may be several stories tall and the length of two or more football fields. And the newest trend in
warehouse automation is the use of warehouse robot technology, where small robots assist with
product movement.

Climate-Controlled Warehouse

Warehouses handle storage of many types of products including those that need special handling,
such as freezers for storing frozen products, humidity-controlled environments for delicate
products, including produce or flowers, and dirt-free facilities for handling highly sensitive
computer products.

Distribution Center

There are some warehouses where product storage is considered a very temporary activity. These
warehouses serve as points in the distribution system at which products are received from many
suppliers and quickly shipped out to many customers. In some cases, such as with distribution
centers handling perishable food (e.g., produce), most of the product enters in the early morning
and is distributed by the end of the day.
3.0 FUNCTIONS OF WAREHOUSE in AIRLINES

STORAGE:
This is the basic function of warehousing. Surplus commodities which are not needed
immediately can be stored in warehouses. They can be supplied as and when needed by the
customers but in airlines they store their passenger’s details and protect it.

PRICE STABILIZATION:
In general warehouses play an important role in the process of price stabilization. It is
achieved by the creation of time utility by warehousing. Fall in the prices of goods when their
supply is in abundance and rise in their prices during the slack season are avoided where in
airlines they used the data where they stored and used it for marketing and through it they
establish their price strategy.

RISK BEARING:
When the goods are stored in warehouses they are exposed to many risks in the form of
theft, deterioration, exploration, fire etc. Warehouses are constructed in such a way as to
minimize these risks. The same actually happens with Airlines which is through data breach and
risk of their physical warehouse to be robbed is also high so through warehousing properly they
can avoid it.

FINANCING:
Loans can be raised from the data warehouse keeper against the goods stored by the
owner. Data’s act as security for the warehouse keeper. Similarly, banks and other financial
institutions also advance loans against warehouse receipts. In this manner, warehousing acts as a
source of finance for the businessmen for meeting business operations.

GRADING AND PACKING:

In general warehouses nowadays provide the facilities of packing, processing, and grading of
goods. Goods can be packed in convenient sizes as per the instructions of the owner. The grading
and packing is also relatable for airlines who produces a lot of merchandise.
4.0 IMPORTANCE OF WAREHOUSE TOWARDS AIRLINES

In generally Warehousing or storage refers to the holding and preservation

of goods until they are dispatched to the consumers. Therefore, there is a time gap
between the production and consumption of products. By bridging this gap, storage
creates time utility and that’s how even airlines manage their warehouses.

In another hand, there is need for storing the goods such as merchandise of
airlines to make them available to buyers as and when required. Some amount of
goods is stored at every stage in the marketing process. Proper and adequate
arrangements to retail the goods in perfect condition are essential for success in
marketing. Storage enables a firm to carry on production in anticipation of demand
in future.

A warehouse for airlines is a place used for the storage or accumulation of

goods that the particular airlines produces It may also be defined as an
establishment that assumes responsibility for the safe custody of goods and data’s .
Warehouses enable the businessmen to carry on production throughout the year
and to sell their products, whenever there is adequate demand.

Finally, for Airlines warehouse arises also because some goods are produced
only in a particular season but are demanded throughout the year. Similarly, certain
products are produced throughout the year but demanded only during a season.
Warehousing facilitates production and distribution on a large scale.
5.0 WAREHOUSE PROCESSES (ACTIVITIES IN THE PHYSICAL
WAREHOUSE OF AIRLINES)

5.1 Receiving

In warehousing receiving is the first warehouse process and one of the most crucial. To
perform the receiving process properly, the warehouse should be able to verify that it has
received the right product, in the right quantity, in the right condition, and at the right time.
Failing to do so will have consequent impacts on all subsequent operations even in airlines
industry.

Receiving also involves the transfer of responsibility for the goods to the warehouse. This
places accountability on the warehouse for maintaining the condition of the goods until they are
shipped. Properly receiving cargo will allow you to filter out damaged goods and avoid liability
for them.

5.2 Put-Away

Put-away is the second Airlines warehouse process and is the movement of goods or
merchandise from the receiving dock to the most optimal warehouse storage location. Failing to
place goods in their most ideal location can impair the productivity of warehouse operation.
When goods are put away properly, there are several benefits:

 Cargo is stored faster and more efficiently

 Travel time is minimized
 Safety of goods and employees is ensured
 Warehouse space utilization is maximized
 Cargo is easier and faster to find, track, and retrieve
5.3 Storage

Storage is the airlines warehouse process in which goods are placed into their most
appropriate storage space. When done properly, the storage process fully maximizes the
available space in their warehouse and increases labor efficiency.

 5.4 Picking

Picking is the warehouse process that collects products in a airlines warehouse to fulfill
customer or passengers’ orders. Since it is the costliest process in the warehouse, comprising as
much as 25% of the total operating expense, optimizing this process will allow to reduce costs
significantly and increase warehouse efficiency. Streamlining of this process should also focus
on achieving higher accuracy, as errors can have a direct impact on their customer satisfaction.

5.5 Packing

Packing is the last warehouse process that consolidates picked items in a sales order and
prepares them for deliver to the customer. One of the primary tasks of packing is to ensure that
damages are minimized from the time items leave the warehouse. Additionally, packaging must
be light enough so as not to increase the weight of the goods and minimal enough to control
packaging costs.